Hillary Clinton will come out against the so-called Cadillac tax, a major piece of Obamacare which is intended to control health care costs.
According to The New York Times, Clinton aides informed Randi Weingarten, the president of the American Federation of Teachers (AFT), of the Democrat’s plans to speak out against the tax within the next few days.
Clinton’s move could cause some conflict with Democratic circles.
The Obama administration and many health economists support the tax on the belief that beneficiaries of the plans are apt to incur more medical services, thus driving up overall health care costs. One of the major goals of Obamacare — and the Cadillac tax — was to drive costs down.
But unions generally oppose the Cadillac tax because they often negotiate for better health care benefits in lieu of salary increases. Under Obamacare, beginning in 2018, employers will be taxed at a rate of 40 percent on plans with annual premiums that exceed $10,200 for individuals and $27,500 for families.
Republican also oppose both the tax and Obamacare in general.
Clinton signaled that she was considering tackling the tax in a questionnaire she submitted to AFT earlier this year.
“One area of the ACA that I am examining is the so-called ‘Cadillac’ tax. As currently structured, I worry that it may create an incentive to substantially lower the value of the benefits package and shift more and more costs to consumers,” Clinton wrote in the questionnaire.
The union endorsed Clinton in July.
The issue of the Cadillac tax re-surfaced late last year after the revelation of videos in which MIT health care economist Jonathan Gruber was seen discussing the implementation and passage of Obamacare. While President Obama had insisted that the Cadillac tax would not dissuade employers from providing their employees with health care plans. But Gruber said in one video that the law was designed to do just that.
Gruber said that the most feasible way to implement the politically unpopular tax was by “mislabeling it, calling it a tax on insurance plans rather than a tax on people when we all know it’s a tax on people who hold those insurance plans.”
Gruber went on to say in the video, which was recorded at the Pioneer Institute in 2011, that the tax scheme was designed to eventually encompass all employer-sponsored health care plans. To accomplish that, Obamacare’s architects, a group which included Gruber, tied the level at which the Cadillac tax kicks in to the rate of inflation. Since health care costs have historically increased at a faster rate than inflation, all employer-sponsored plans would eventually be taxes.
“What that means is the tax that starts out hitting only 8 percent of the insurance plans essentially amounts over the next 20 years essentially getting rid of the exclusion for employer sponsored plans,” Gruber said during his speech. “This was the only political way we were ever going to take on one of the worst public policies in America.”